The Lean Startup – A New Way of Doing Dusiness

One of the overarching topics of my Product Development and Commercialization course was that of the Lean Startup. This method addresses the risk of companies exhausting time and capital into developing a product that may fail in the market. Rather than a predictive market analysis only before the development of a product, the goal is to be responsive to the demand of the market throughout product development. To do this, prototypes, known as a Minimum Viable Products, are used within the Lean Startup method.

For the development of a product, the Minimum Viable Product (MVP) is an iteration of a product with that has been developed with just enough features for valuable customer insight to be gathered from it, for the use of future development. To minimize development costs and risk of failure, MVP’s offer a market analysis based on what the innovators and early adaptors of the diffusion of adoption curve. The process of improving an MVP to better fit market demand revealed throughout is repeated, as learning is done on a continuous basis. The benefits of this include greater opportunities, faster revenue streams, reduced costs, and the ability to incorporate a tolerance for failure within the business model.

However, the potential disadvantages of the use of MVP’s should also be addressed., To start, there is the fear of idea theft due to MVP iterations, as companies would no longer be going into “stealth mode” during the development phase. Additionally, the use of MVP’s still does not guarantee a flawless market analysis for the company.

Additionally, many large companies are unable to easily shift away from traditional methods, as this typically requires an entire shift in corporate culture as well. Right now, many companies take advantage of experiential marketing as a way to not only get potential customers more engaged with the product, but to also collect market research based on these engagements. My own personal experience in experiential marketing was in my second job I’ve ever had, and involved allowing customers to try out a product (typically food, the easiest type of product to sell through this marketing in my opinion). Besides feeding the masses in crowded grocery stores, a large part of my job was an intensive report on customer responses to the product, including suggestions to improvement. While this type of marketing is a start, the Lean Startup method would have customers involved with the development of a product from it’s earlier stages, rather than after much time and resources are already exhausted.

It was also discussed in class how one could avoid the use of MVP’s, and dive into a successful, fully developed product right off the bat. Several possible ways to do this include having customers buy the product based on the hype around it, using crowdfunding websites such as Kickstarter, or understanding the market to such an intimate degree, that there is no need for further market research. Another strategy is the include celebrity endorsements in a marketing plan, which will be discussed in the next blog post.